EU starts investigation of Aspen's cancer drug pricing

Aspen Pharmacare is under investigation by the EU's competition authorities over its pricing of five cancer medicines, amid allegations of price-gouging.

The European Commission said it was looking into concerns that the South African pharma company had "engaged in excessive pricing" for the five drugs - with reports that some drugs had their prices increases by several hundred per cent - and had "abused a dominant position" in the market.

The five generic medicines - chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan - are used for treating a broad range of cancers, and the Commission is concerned that Aspen may have used the tactic of withdrawing or threatening to withdraw them from sale in some EU member states, leading to shortages.

This is the first time that the EU authorities have investigated a drugmaker for unjustified price increases, although in the US the Securities & Exchange Commission (SEC) has started an investigation into possible price-fixing among generic medicine drugs in the wake of some very high-profile pricing scandals.

The source of the information has not been divulged, but it may not be a coincidence that earlier this year, UK researchers told delegates at the European Cancer Congress (ECCO) in Amsterdam that the prices of 14 cancer drugs have increased by between 100% and nearly 1,000% over the past five years in the UK - adding £380m to the NHS drugs bill.

Their analysis included data on melphalan and busulfan - both supplied by Aspen in the UK - and the two researchers (Andrew Hill and Melissa Barber) namechecked the company in their report. The price of melphalan went up from 55 pence for 2mg in 2011 to £1.82 in 2016, a rise of 230%, while the cost of leukaemia drug busulfan climbed from 21 pence per 2mg to £2.61 - an increase of more than 1,100%.

Aspen's price rises were not acted on by the UK, but in Italy the drugmaker was fined after threatening the Agenzia Italiana del Farmaco (AIFA) that it would stop supplying drugs if they were unable to introduce big hikes. In their report Hills and Barber said: "The negotiation strategy adopted by Aspen was so aggressive as to reach the credible threat of interrupting the direct supply of the drugs to the Italian market."

The EC said its investigation will cover all countries in the European Economic Area except Italy, which fined the company €5m last September for "unfair prices with increases up to 1,500% for life-saving and irreplaceable drugs in the treatment of onco-haematological patients, especially children and elderly people".

The UK Department of Health introduced the Health Services Medical Supplies (Costs) Bill in order to be able to regulate prices in the future, and this was passed on 27 April. Even before this, however, some actions had been taken by the authorities.

Last December, Pfizer was fined £84m by the Competitions and Markets Authority (CMA) for conspiring with Flynn Pharma to raise the price of epilepsy drug phenytoin, and the CMA has since launched an investigation into the pricing of Actavis' hydrocortisone tablets.